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EMERGING MARKETS-LatAm currencies up; rally undeterred by hawkish Fed

SAO PAULO, Feb 1 (Reuters) - Latin American currencies turned higher on Thursday as hawkish remarks from the Federal Reserve failed to derail a monthlong rally fueled by investors' appetite for risk. In its policy statement on Wednesday, the Fed left interest rates unchanged on Wednesday but bolstered expectations that they will continue to rise by saying inflation was likely to accelerate this year. Those comments initially led to losses in emerging market currencies, which offer higher yields, but the sell-off proved short-lived. Instead, traders focused on Friday's key U.S. payrolls report, which is likely to offer additional hints on whether stubbornly slow inflation is accelerating toward the central bank's target. Currencies from Brazil, Mexico, Chile and Colombia firmed between 0.4 percent and 0.9 percent, extending a rally underpinned by expectations of accelerating global growth. Stock indexes also rose throughout the region, although gains were somewhat muted. Brazil's benchmark Bovespa stock index rose 0.4 percent as a decline in shares of lender Banco Bradesco SA kept a lid on gains. Bradesco forecast fast loan book growth this year but more pressure on margins, disappointing investors. Goldman Sachs analysts called the company's predictions "conservative."

Key Latin American stock indexes and currencies at 1720 GMT:

Stock indexes daily % YTD %

change change Latest

MSCI Emerging Markets 1248.93 -0.45 8.3 MSCI LatAm 3216.51 0.58 13.08 Brazil Bovespa 85262.01 0.41 11.60 Mexico IPC 50688.65 0.46 2.70 Chile IPSA 5872.06 0.28 5.53 Chile IGPA 29500.99 0.28 5.43 Argentina MerVal 35132.59 0.56 16.85 Colombia IGBC 12179.48 0.55 7.11 Currencies daily % YTD %

change change Latest

Brazil real 3.1670 0.39 4.62 Mexico peso 18.5090 0.52 6.43 Chile peso 598.73 0.57 2.66 Colombia peso 2804.95 0.87 6.31 Peru sol 3.212 0.09 0.78 Argentina peso (interbank) 19.4800 0.87 -4.52 Argentina peso (parallel) 19.87 0.40 -3.22

(Reporting by Bruno Federowski; Editing by Lisa Von Ahn)